Freidman Billings: iPhone Component Analysis Good News for Marvell, Linear Tech

7/14 - "After cracking open Apple's (AAPL) iPhone and looking at its insides, FBR has determined..."

'Marvell does have the WiFi chip ($2–$3 of content) in the iPhone, as we thought. With about 10 million incremental iPhones and iPod Touches in 3Q versus 2Q, incremental revenue contribution is 2%–3% sequential growth, as we expected. We like shares of MRVL here, given that they have retraced to the $15 level, and since the firm is a margin turnaround story now as operating expense leverage kicks in over the next year.'

'Linear Technology (LLTC) does supply the battery/USB charger ($1.00–$1.50 of content), as it did in the prior generation. With 10 million incremental iPhones and iPod Touches in 3Q versus 2Q, incremental revenue contribution is about 3% sequential growth, as we previously thought. Linear (Market Perform, $38 target) is a defensive stock to own in difficult macroeconomic times.'